Cavendish hires Teneo to shore up defences as foreign buyers circle UK mid-market banks
The City broker formed from the Cenkos-Finncap merger has completed a defensive valuation and is pivoting toward broking and private markets to reduce reliance on cyclical deal fees.
Cavendish has enlisted specialists from Teneo to run an independent valuation exercise designed to help the board repel low-ball takeover approaches, the boutique investment bank disclosed in its latest annual report. The work was commissioned last year during what the company described as a period of uncertainty and has since been completed, with Teneo no longer retained.
The move comes after Cavendish rejected a bid from S&W for its mergers and acquisitions advisory arm in 2024. Chair Lisa Gordon said the valuation was standard practice for any listed company wanting to be prepared for every eventuality.
Consolidation gathers pace
London's mid-tier investment banking sector has been reshaped by a wave of tie-ups. Panmure Gordon and Liberum merged last year, while Numis was acquired by Deutsche Bank in 2023. At the same time, overseas purchasers have been picking off British financial services groups at valuations that look attractive by international standards. Schroders and Beazley both agreed sales to foreign rivals earlier this year, while Evelyn Partners changed hands for £2.7bn in February, bought by Natwest after its private equity owners put it up for sale. Fund managers W1M and Redwheel are also reported to be exploring exits.
Diversification drive
Alongside the defensive work, Cavendish confirmed plans to reduce its dependence on cyclical investment banking fees by building out its broking and private markets capabilities. The board labelled the diversification a key strategic priority that would allow the firm to support clients across market cycles. Blockbuster IPO mandates and large M&A assignments have traditionally powered City profits, but years of thin issuance and geopolitical turbulence have forced lenders to seek steadier income streams.
It is good practice for the board of any listed company to undertake an independent valuation exercise to ensure it is prepared for any eventuality.
With the valuation complete and Teneo's mandate ended, Cavendish appears to be positioning itself for a more resilient future, whether that means staying independent or engaging with suitors from a position of strength.
